WASHINGTON — Retail apparel prices rose in August, driven by increases in the men’s, girls’, infants’ and toddlers’ categories, the U.S. Labor Department’s Consumer Price Index showed on Wednesday.
Prices for men’s wear increased a seasonally adjusted 0.3 percent, while prices for girls’ apparel rose 1 percent and prices for infants’ and toddlers’ were up 4.1 percent last month. Prices for women’s apparel fell 0.3 percent in August.
Overall apparel prices gained 0.3 percent in August, building on an increase in July that ended three straight months of price declines in retail apparel prices.
“I think apparel prices are going to remain somewhat under pressure,” said Ryan Sweet, director of real-time economics at Moody’s Analytics. “Looking at manufacturing and the overhang of inventory, it seems that retailers overall are optimistic about the upcoming holiday shopping season, which is reflective of the strong import [volume] that came through the West Coast ports in August.”
“But the consumer probably won’t spend quickly enough to work those inventories down and we will likely see retailers be forced to cut prices toward the end of the holiday season,” Sweet said. “Discounting could be deeper this year given the amount of inventory on hand.”
In the women’s category, prices for outerwear fell 3.4 percent in August, while prices for suits and separates declined 0.4 percent. There were some increases in the category, with prices rising 2.9 percent for dresses and 0.1 percent in the combined underwear, nightwear, sportswear and accessories category.
Men’s wear prices were led by sport coats and outwear, which saw a 3 percent increase in prices, followed by a 0.3 percent increase in shirt and sweater prices. Prices for furnishings rose 0.2 percent, while prices for pants and shorts fell 0.8 percent.
Prices for all goods sold at retail fell a 0.1 percent, while core prices, excluding volatile food and energy pieces, were up 0.1 percent in August.
Michael Montgomery, U.S. economist at IHS Global Insight, said the consumer prices “eased” primarily due to falling gasoline prices, which declined 4.1 percent last month.
“Gasoline is likely to be a drag once again in September as the refinery issues that tempered the drop in gasoline prices in August abated,” Montgomery said.
He said the core index has “notched the same increase in five of the last six months,” adding that “weak goods prices and firmer services prices have been an ongoing story for several years.”
“Other than being below desired inflation, the CPI is not likely to be a major topic affecting the Federal Reserve’s decision to raise or not raise interest rates,” he said. Instead, it will be due to energy and downward pressure on goods prices because of the strong dollar. “The dollar will be a major topic, but its impact on goods prices is derivative. This CPI report will not change minds about policy, but all the other factors driving the economy are putting scant upward pressure on prices, and the major driver [energy] is not under their control. Our bet is still no increase in September, but the ramifications of a rise would be primarily symbolic.”